World stocks spooked by US rate hike prospect

Latest Update: September 13, 2016 | 219 Views

LONDON: European stock markets slumped on Monday, spooked by the prospect of a US interest rate hike as early as this month, and mirroring earlier falls in Asia.

Speculation that the Fed may tighten rates in September also weighed on New York, but bargain-hunting lifted Wall Street into mildly positive territory after a weaker start.

This, in turn, helped European markets also bounce off early lows.

Eurozone markets in particular were also worried by signs that the European Central Bank has become less aggressive in its support for the economy, including with its huge quantitative easing programme.

In London, the banking sector led the way down on the prospect of higher rates, with Royal Bank of Scotland losing 3.4 per cent and Lloyd’s just under 4pc.

Mining stocks also dropped as commodities prices fell, with BHP and Rio Tinto both shedding over 2pc.

In Frankfurt, Linde shares fell 7pc after the German gas giant and US peer Praxair ended merger talks, leaving intact the number one spot in industrial gases for France’s Air Liquide, which fell 1pc in Paris.

Across the Atlantic, Agrium Inc and its rival Potash Corp on Monday said they had agreed to merge to create a $36-billion global crop fertiliser behemoth.



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